Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

85. Memorandum From Seymour J. Rubin of the U.S. Delegation to the Organization for Economic Cooperation and Development to the Administrator of the Agency for International Development (Bell)¹

Washington, February 12, 1964.

SUBJECT

• International Cooperation in Foreign Aid

Congressional and public criticism of our aid program and its accomplishments has, in my judgment, raised questions among our allies as to future U.S. intentions for aid. The basic reason for any aid program is national self-interest; thus French aid to francophon Africa, or British aid to the Commonwealth, will not be greatly affected by the U.S. debate or by reduced U.S. appropriations. But any faltering in U.S. leadership could seriously prejudice efforts to increase the volume of aid of the notable laggards, to bring about an amelioration of terms, and particularly to better efforts of other donors in important target areas—India, Turkey, Pakistan, for example.

It is important that the U.S. make manifest its continued faith in and determination to support a large aid program, tailored to the social and economic development needs of the less developed countries. It is equally important that we make clear that progress in the LDCs is essential to the security and prosperity of the free world; that the benefits of such progress accrue to others as well as to the U.S.; and that the responsibility for attainment of progress must be a shared responsibility. Particularly must the responsibility be shared in those areas which are not the special province of a particular donor—as Africa is of the U.K. and France, or Latin America is of the U.S.

Specifically:

1. I would suggest that in discussions with the other major donors, we subordinate exhortation to increase of total volume or general improvement of terms to efforts to get larger and better contributions in specific target areas. This would probably mean concentrating on contributions to countries which are the subject of IBRD or OECD consortia, or on such other LDCs (such as Brazil, Colombia, Nigeria) as we may feel warrant special effort. This would also imply tailoring our approach to the various donors to their own special interests; for example, asking Italy to increase its contributions in the Mediterranean Basin (and in Latin America, where there are strong cultural ties), rather than asking in more general terms for an increase in the whole of Italian aid.

2. In our discussions with minor donors, I would also attempt to mesh our effort with their special interests (Norwegians are interested in fisheries, etc.), but I would put greater stress here on coming up to a respectable percentage of GNP as an overall target.

3. As to techniques, I would suggest the following:

(a) As a long-range matter, a study (about which Walt Rostow and I talked in Paris a year ago) of the market potential in the LDCs, given a reasonable amount of stability and progress, with the evident aim of demonstrating that aid is in the end to the self-interest of the donors.

(b) In the shorter range, I believe it would be useful, as Mr. Kaplan² has suggested, to have a Presidential meeting with DAC Ambassadors in Washington. Such a meeting might be supplemented by the designation by the President or Secretary of State of a high-level representative to visit DAC capitals. In addition to emphasizing the importance which the United States attaches to an effective and coordinated free world aid program, such an emissary could zero in on some of the specific targets mentioned above in paragraph 1. He could also state orally, but at a high level, the seriousness with which the United States regards the questions of comparability of volume and terms of aid. This would be a one-shot mission, based on a desire to explain clearly U.S. intentions at a time when they have become the subject of some doubt; and the effort would be designed to enhance the future negotiating position of the U.S. Ambassador.

(c) I suggest that a serious approach be made, also, to at least the major aid recipients, The problems of the recipients vary considerably; but it does seem to me that a good deal more might be done by them than is done at present in the way of obtaining better and bigger development loans from their donors. They might be encouraged to resist short-term credits for long-term projects, to strengthen their representation in DAC capitals, and to take a variety of other steps to improve their capacity to get useful assistance from non-U.S. sources. Such an approach would have to be handled with tact and discretion; but it would have the not-inconsiderable virtue of underlining the responsibilities of the LDCs and stressing that they cannot rely on the U.S. as the inevitable residual rescuer.

(d) The importance of mobilization of private investment, local and foreign, is a cliche, as are most of the slogans which in this field replace effective steps to encourage mobilization and productive investment of private capital. A variety of committees, groups, etc. already exist, whose stated purpose is to mesh private initiative and investment with developmental needs. If a conference on this subject is to be convened, or new groups formed, care should be taken to survey those already in the field, and to decide whether sufficient encouragement has been given to their efforts. A first step would be to talk to the U.S. side of the BIAC. A second would be to give more forthright support to such ventures as ADELA which, for all their faults, are attacking the problem by a method other than sloganeering.

(e) Finally, skepticism in the sophisticated private community is such that I would approach any large conference with caution. The danger is all too great that such a conference will seem to the sophisticated private interests to be a mere propaganda exhibition. A smaller, well-prepared session, at which government representatives would explain their policies and businessmen would have an opportunity to explain theirs, on the basis of a carefully worked out agenda, might be useful. Even that would run into considerable skepticism in capitals less attuned to the importance of public relations than Washington.

Seymour J. Rubin ³

1. Source: Washington National Records Center, RG 286, DAC Material: FRC 70 A 5922, Chron, S. J. Rubin, 1964 Correspondence. No classification marking. Drafted by Rubin who held the rank of Minister with the delegation.
2. Presumably Jacob J. Kaplan, Director of International Development Organizations Staff, AID.
3. Printed from a copy that bears this typed signature.